Steady as a Rock Band: Video Games May Be “Recession-Proof”

Even with gas prices falling faster than an obese BASE jumper, traveling is still expensive. Unless, of course, your ideal vacation is evading the long arm of the law in Liberty City or scrounging up irradiated table scraps in a post-apocalyptic wasteland. A jaunt to either of those fine locales runs you a one-time fee of about $60.

A conveniently priced way to “get away from it all” without forcing you to leave the house (or even put on pants), video games have found a niche among people who’d rather spend their time off kicking it at home instead of globetrotting. Thanks in part to markets like this one - people whose vacations comprise a console, a controller, and 40-plus house of blissful introversion – some business analysts have suggested video games could be “recession-proof,” according to an article on The Economist’s web site.

Naturally, a claim that bold has numbers to match. When all is said and done, 2008’s global video game sales (including consoles) are expected to top $49 billion. Video game revenues are projected to catch up to those of the film industry worldwide, according to a report from Hudson Square Research, having already overtaken the music industry in the U.S. back in 2007. One major reason for the spike in sales is that games can be played at home, appealing to everyone from your hardcore agoraphobic to your garden-variety, misanthropic shut-in (and maybe those “normal” people, too).

Note: Graph does not take into account international trade, other points of view, or common decency.

The (relatively) cheap escapism a game provides is indulged in by 53% of American adults and 97% of teenagers, according to a Pew Internet & American Life Project study. This legion of gamers (average age: 30) has proven its ability to keep the industry afloat amid economic tumult. During America’s 2001 recession, the gaming industry still thrived despite being much smaller than it is today.

Two other staples of the industry also lent a hand: sequels and next-gen consoles. The newest iterations of Mario Kart, Smash Bros., Grand Theft Auto, Call of Duty, and Gears of War were all in the top 10 for American sales ratings. And every time a new console is released, more buyers join the gaming fold… especially when generous price cuts are in order.

To most, this is enough evidence to suggest that Sackboy, Marcus Fenix, and Kirby really do live in a recession-free environment, or at least in real estate more secure than the rest of the entertainment industry.

But the gaming industry isn’t without its own woes, according to The Economist article. In the most recent financial quarter, two industry behemoths both posted losses. Electronic Arts is down $310 million (costing 6% of its workforce their jobs) and Activision Blizzard is reportedly $108 million short of breaking into the black. Additionally, Wii and DS sales in Japan have tapered off since October, leading some to theorize that when times get tough, casual gamers – the Wii’s core audience – will put their hobby on hiatus until things get better.